VW Tiguan retractable tow hitch

I would have thought that whatever you cover it with will trap water in it. I would cover in a thin film of grease and wipe and clean with brake cleaner whenever your going to use it. 

On the Tiguan Mk2 forum, some people use a balloon, others have used a 'lubricated' balloon, commonly bought in gents toilets or Boots.

The material used by VW  for the ball has very poor corrosion resistance.

I just rub the ball with scotchbrite before each use, which also helps remove any pick-up from the Alko stabiliser pads.