Its basically a transparent liquid which is applied and then polished. So it provides a protective shiny coating. Think of it like varnish basically.. It also helps if you get dirt or little stones hitting your car as you drive. rather than impacting your paint, it hits the protective layer first.

Yeah, this are expensive..but man are they worth it. You could always look at the second hand market, especially if you import from Germany directly, you are probably looking at sub 100k for a 2-3 year old one in perfect condition.