There are a lot of misconceptions surrounding waxes and polishes and how and when to use them.
Simply put, when you polish you remove very thin layers of paint. Most of the time you are only removing microns of paint which isn't even measurable. Polish your car when you want to correct flaws in the paint or remove scratches, swirl marks, paint over spray, etc. An example of a flaw would be the "orange peel" effect or dimples in the paint, generally the result of a poor paint application. Another reason to use a polish is if your paint has oxidized, a result of prolonged exposure of unprotected paint to sun, acid rain, and other harsh weather conditions.
Polishes come in different degrees of abrasiveness, from very mild to aggressive. As a rule, I use the least aggressive product to do the job. Polishes can be applied by hand or machine.
When planning your polishing project consider the method of application: by hand or machine. I prefer machine application because it is more difficult to get constant even pressure and thorough coverage with the hand method. Plus the hand method takes longer and requires more effort. You can vary the aggression you get when polishing by considering the pad you use. Cotton pads are generally used when hand polishing and are very aggressive. Foam pads come in a variety of abrasiveness. Again, I use the least aggressive product for the job. A correct application of polish can improve the car's finish and provide a higher gloss.
Always follow up polishing with a coat of wax or sealant. Waxes and sealants protect your paint from exposure and provide a nice finish. Waxes, such as carnauba, as a rule, have no paint cleaning ability or abrasive qualities. However, there are products on the market that do contain a very mild amount of abrasive. Use this type of wax or sealant if you don't have time to polish your vehicle before waxing. Waxes and sealants can be applied by hand or machine, and pads for waxing are soft and non-abrasive. Waxes should be applied every 3 months and sealants every 6 months to a year depending on your environment.