It would typically be difficult for your friend to take out insurance on your vehicle since he does not have what is called "insurable interest" in it since he is neither on the loan or registration. You can discuss with your current insurance company the situation though and see if they will allow him to take out his own policy on the vehicle.

If your insurance company will not allow it one of our partners, Esurance, allows for people to purchase a policy even if they do not own the vehicle. They do not have this coverage available in every state so to find out if they have it available in New Jersey for your friend by getting a car insurance quote here.