Is it better to work with an agency or approach sponsors directly as a racer?

It depends on the situation, series, and driver. Toyota works with both - sometimes directly with drivers who represent themselves, sometimes with PR agencies, and sometimes with team owners like Antron Brown who now owns his own team. For smaller teams and younger racers who likely don't have agents, representing yourself is perfectly acceptable. By the time you're at a level where you need an agency, you've probably already established significant sponsorship relationships.