LOD stand for "Levels of Detail". This is present in every professional game to reduce demand and performance on the workload of the system. It removes unimportant polygons that aren't visible at a further distance which keeps performance of your system running smoothly. Most people here will say, "Oh but I don't have some shit potato PC, I don't need that." Most of those people are the same people who complain when their games crash on a constant basis and blame Rockstar for making a terrible PC port. I'd be willing to bet that if I made a real life counterpart vehicle for each vehicle slot in the game and each vehicle was optimized, had all 5 LOD levels with polygon counts relevant to the game's load. I wouldn't experience a single crash in my game relating to the vehicle mods. If anything, it'd be from the mass of edited files causing the game to freak out. A typical car mod of 300k polygons with not a single LOD is equal to 6 spawned default game cars. Now imagine that being rendered at a distance with multiple spawned in traffic. This is where performance loss reaches its lowest and you'll experience crashes.
^TL;DR, LODs are important, don't shy away from them. Here's a useful tutorial on how to properly create LODs for your models.
https://www.accuratestudio.com/thread/99-setting-up-vehicle-lod-models-properly/
