If possible mount your flag towards the centreline of vehicle. That way it will be less likely to get wiped off by an overhanging Mulga branch...
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I would take a flag everywhere there are sand dunes and the Canning certainly has a few. There's a point when a flag can be too tall and the flag gets ripped off the pole, especially when parking under trees for camping etc.
Also something that is too flexible bends and hits your car when driving fast, in wind or in trees. One that you can add or subtract pieces from is a good idea. As Scott mentioned the trees on the side of the road can play havoc as I had on some fast sections on the Canning last year. The pole would hit a bush and then wack my side mirror! Centre mounting would be best but I don't like it blocking my view.