Very familiar with the city, the airport and the people.

I would definitely get a hotel room. There is a "transit hotel" facility availabe at DEL airport itself but it's often booked up fully and is so very basic that you will routinely end up with hitherto unknown guests in the room as the airport personnel are permitted. The only places to wait upon arrival at DEL airport itself -- besides what I've just mentioned -- is the arrivals hall (where the hired car drivers wait with family/friends receiving international travellers or another paid waiting hall. Both are so basic (i.e., you'll know what I mean if you need a bathroom) and often overcrowded (i.e., no seats) that I'd definitely head to a hotel even if it were the cheaper ones that go for 1200-1800 INR (c. 30-45 dollars).

What I'd do in your situation would be determined by what the budget could afford. I'd definitely recommend that those unfamiliar with DEL get a hotel on arrival even if they'll be out the door early in the morning.