Can a car be transferred via contract?

If you made the horrible mistake of co-signing, it is too late to fix with a contract like this. He can sign the contract, but if he breaches the contract with the lender he can breach a contract with you and there is little you can do. You can't take the car if he does not want to transfer it to you, and even then you could not get a clear title. You can sue for breach of contract (and if he can't pay for the car, he can't pay a judgment). Never, ever co-sign.

Mr. Riddle is correct. Never cosign for anyone.

It cannot be said enough. NEVER co-sign for anyone.
He needs a co-signor because he has poor credit. He has poor credit because he does not pay his bills.
If you do it anyway, you will need a contract that constitutes a valid security interest under the UCC, it will have to be legally perfected, and the title will have to show you as a second lien holder in order to fully protect you. You should get an attorney to work up the papers.
Also, a co-signor is usually considered a borrower, not a mere guarantor, so your friend's late payments may affect your credit score.

No, no, no, do not do it! As the other attorneys have indicated, there is a reason this person needs you to co-sign, and it is not a good reason. I would say that you can expect this to go badly for you if you do this. Don't do it!