DIY: Repairing Paint Chips
When it's good and set you can, very carefully, sand it with 800-grit Wet/Dry sandpaper to blend it all in. This will leave a dull finish so you will need to follow up with some medium to fine polishing compound and a soft lint free cloth. This will make the repair nice and shiny.
What about chips in the middle of a body panel? If you used the procedure outlined above and it didn't come out as nice as you'd like, you might try using spray paint to get a better and more invisible repair. You'll need to use the lacquer thinner or alcohol to clean and degrease the area and make sure there is no rust in the injury. Now get a thin piece of cardboard, a file folder works very nicely, and cut a 1½" hole in the center. Here's a little hint, carefully warm the spray primer in a bowl of warm water to about 100°. This will increase the pressure in the can and give you a more even spray pattern.
Hold the cardboard in one hand with the hole over and about two inches from the injury. Now move the paint can back and forth while spraying. Start spraying on the cardboard, move it across the hole and stop spraying on the cardboard. Do not start or stop the spray over the hole, it will run and lump on the car. If the cardboard is kind of small, mask the car with more of the cardboard. Don't use newspaper because the paint will soak right through it. Give it three or four light coats. If you think it's not enough, then you have the right amount applied. You don't want the paint to run.
Now go inside and have a drink and relax. In about an hour go out and do it again. When it's done and dry, take the masking off and using your 800-grit sandpaper take off the bulk of the primer leaving it to almost fill the injury. Use some medium-rubbing compound to remove any overspray from the surrounding paint. Keep in mind that the primer will shrink in a few days.
Now using the same procedure you used for the primer, mask the area and using your cardboard with the hole spray the matching paint on the injury. Three or four coats about 30 minutes apart should do the trick. Take the masking off and let it dry for 24 hours. Use your medium rubbing compound to take care of the over spray. After a couple of days repeat the process with the clear coat. You might want to give it a light sanding with the 800-grit sandpaper but I think the medium-rubbing compound should be enough to get a nice shine out of it.
You might still be able to see the repair, but no one else will notice it unless you point it out.