I prefer the trailer...but have used a dolly with small compact cars without difficulty but never bothered backing up so I don't know what that is like.
I use the same extension cut down to 24" with a weight distrubution setup. I have to run it maxed out tw wise but it works well. It looks like you are using it as a 34" extension...if that's the case you the car+trailer will need to be 6000# max (with a wt. dist. setup) and a lot less without a dist. setup.
Provided you are not doing a one way rental, storing the trailer at your destinations may be an issue. Another consideration to keep in mind is how you are going to secure the car to the trailer...some cars are more of a challenge then others.