When I add new police vehicles to LSPDFR I notice that I am the only one in the game using the car.  My back up units and other units are in the default police vehicles.  I have installed my modded cars in \update\x64\dlcpacks\patchday5ng\dlc.rpf\x64\levels\gtav

I had to add them such as police2 because they weren't there already.  Should I be installing these files elsewhere?

Any help would be appreciated.

Adding new police cars to the game won't suffice, because the plugin only chooses backup vehicles from a select list of models, which also needs to be changed. To customize your backup vehicle and ped models, make changes to the Grand Theft Auto V\lspdfr\backup.xml file in any text editing software, such as Notepad or Notepad++.

Also note that this will only affect backup vehicles that are spawned using the LSPDFR backup menu - ambient police cars cruising around Los Santos will not change. If you want to change those, it would be easier to replace the default vehicles (police, police2, police3, sheriff) with the models you want to see cops use. Most police car mods are replace mods anyway, so that shouldn't be too difficult if you follow the instructions. Alternatively, there are mods that add more cars to the streets, the most notable of which is arguably Realism Dispatch Enhanced, which among other things makes highway patrol stand out much more.

Ok gotcha on that.  The ambient models aren't changing.  I added a mod police2 in \update\x64\dlcpacks\patchday5ng\dlc.rpf\x64\levels\gtav  and it seems that all the ambient cars stay at the default police2.  Should I be replacing my police2 in a different location?

Always, always, always replace it in the latest folder.
I recommend installing them in mpstunt for now, rather than patchday's since I like having all of my mods in one DLC, but patchday11 works too.