Orange peel in car paint is very annoying to say the least, preventing the true flat shine your paint has to offer, and is a very common situation with many new paint jobs. The cause for the orange peel could be over spray, or possibly improper temperatures while the painting was taking place.
Set up your pail with water and add a few drops of dish soap. Do the same for your spray bottle.
Wrap your sanding block, using the least aggressive sand paper first, which would be 2,000 grit, and liberally dip into the water and also spray the surface to be wet sanded.
Begin to sand in even strokes using light pressure up and down or across from side to side the specific area of the orange peel. Restrict yourself to an area of about 12 by 12 inches to start with. The surface and body panel must be wet at all times or you run the risk of permanently scratching the paint.
Wipe the water off the surface regularly with your towel so you can see where you are at, always being careful that you don't sand too deep and begin to remove the paint. Also, avoid sanding any edges at all. It is very easy to remove paint from an edge. You may even consider putting painters or masking tape over the edges to be sure they are not sanded.
Respray and dip your paper and continue on as needed. As you wet sand you will be dulling the surface of the paint, but don't worry, you will bring the shine back when using the rubbing compound later.
Move down to the coarser grit of 1,500 and possibly down to 1,000 grit if the 2,000 grit paper is not cutting through the orange peel and flattening out the paint. Never use anything coarser than 1,000 grit on paint. It's best to work with the finer grits and sand longer than try to cut fast with a heavier grit. The object is to gently flatten out the paint.
Finish off using 2,000 grit, which will eliminate any scratches if you used a heavier grit at any time. It's OK if there is still some light orange peel left since the rubbing compound will also reduce the peel as it flattens out the paint.
Use the rubbing compound to bring the paint shine back after the wet sanding. It will also further reduce the orange peel as it flattens out the paint. Use your terry cloth bonnet and apply a small amount of compound on the bonnet and also on the panel. For about a 12 x 12 inch section you will only need about 1 teaspoon of compound.
Work the compound into the panel, working in circular motions, always keeping the buffer moving. Within moments you should begin to see the paint shine come back. Stop often and wipe off excess compound so you can see where you left off and where you need to work further. Stay away from any edges as you buff and leave on or apply new painters or masking tape over the edges to ensure that you don't go over them. The buffer can remove paint from an edge instantly. Never allow the pad to go dry so you don't risk burning your paint.
Continue to buff with the compound as needed without cutting too far into the paint, and when you are satisfied, put on the wool bonnet and you can glaze over the paint without any compound very lightly just to bring back a high gloss. If orange peel remains you may decide to go back and wet sand again following up with the compound.
Apply a new coat of wax. The sanding and compound has removed any wax protection you may have had. A new coat of your favourite wax would probably be in order now, however, if your paint is still fresh and not completely hardened, you want to stay away from using any waxes with silicone in them.
If the orange peel is very light you may be able to avoid wet sanding entirely and just work with the rubbing compound. Always start with the least aggressive sand paper first and work your way to a coarser grit if necessary and always follow up again with the fine 2,000 grit. When buffing with the rubbing compound, keep a light touch and stay away from edges, or apply tape over them.
Avoid sanding on any edges; it is very easy to remove the paint. Use a light hand while wet sanding and when using rubbing compound, only get more aggressive once you are absolutely confident of what pressure or grits work best without removing too much paint. You may want to experiment on an old car panel before doing this job on your new paint, just to get the feel for the wet sanding and compound application.