If your goal is to maximize savings, you should use instance-level consolidation on every SQL Server instance that can be consolidated. After that, you should use server-level consolidation on all servers that you plan to virtualize on-premises or in the cloud. You can also use server-level consolidation on SSAS, SSIS and SSRS workloads, which are not suitable for instance-level consolidation. Database consolidation is a bit more time-consuming process so you would like to do it only for a less amount of servers.
If you simply want to optimize the number of CPU cores on your virtual servers, you should use server-level right-sizing. This is a very handy to get immediate results, especially in environments with 100+ virtual machines.