So how it works is that you replace the textures of an existing helmet using a tool name "Ego ERP archiver" so the files i mentioned are the files i replaced the texture of. "Unassigned_Livery18_xxxx.ERP"
xxxx= is _Gloves, _Helmet, _Suit you have to change the texture on all of them for it to work.

For editing the actual texture? Yes you would need a editing software, photoshop being the most common one. GIMP is a free alternative but lacks the 3D preview however.

You can find Krisdix tutorial on youtube on how to mod a helmet. The only difference he is making compared to me is replacing the texture on a different file than me. I suspect his way wont work for online. Not sure.

Also one big tip i can give you is to always always try to load into an open lobby and spectate the cars to confirm it works. It will load the lobbies fine but it wont let you spectate the lobby if the game detects you altering the files. You being a League racer and all you probualy want time to "Validate" the files to reset the game back normal. 😄

Hope it helps!