VOLKSWAGEN’S new Mk7 Golf wagon is a much more inviting proposition than its predecessor, which was based on a superseded model.

Not only is it cheaper by $1450, it is lighter yet larger than before thanks to its nifty new MQB architecture – the same as the current Golf, Skoda Octavia and Audi A3 – and a sharper dynamic tool to boot.

It also offers more cargo space – 605 litres with five passenger and 1620L with the second row seats flat – than Honda’s CR-V soft-roader, regarded as among the most practical compact SUVs out there. Somehow, it is also more spacious than its larger Skoda Octavia relative.

Cargo wise, the low-slung body might hold less appeal than the high-riding SUV rivals that require no bending at the waist to load.

The 60:40 seats fold flat. With the seats in the upright position, there is sufficient headroom in the rear for your 194cm correspondent, although not as much as an SUV such as the Mazda CX-5.

Volkswagen offers three powertrains in Australia, divvied out over three specification levels. Both the base 90TSI and the Comfortline get the familiar 90kW (between 5000 and 6000rpm) and 200Nm (between 1400m and 4000) 1.4 turbo-petrol from the hatch.

It is a sprightly little unit with plenty of low-down punch once you’ve escaped the lag on takeoff. The seven-speed dual-clutch transmission is still keen to drop a gear, meaning the revs at 3000rpm for little apparent reason, but is much smoother around town than before.

We think VW should at least offer a six-speed manual option, even if Australians are unlikely to buy it in any significant numbers.

Claimed combined fuel consumption is 5.7 litres per 100km of premium 95 RON fuel – we managed 8.1L/100km with heavy right feet, and about 6.5L/100km under more subdued driving.

On the topic of fuel economy, VW’s latest idle-stop system is about the best we have used, and is almost imperceptibly smooth.

VW also offers an upper-spec Highline grade with the choice of two engines, also from the hatch: a tweaked version of the 1.4 petrol with 103kW between 4500 and 6000rpm and 250Nm between 1500 and 3500rpm, or a 2.0-litre turbo-diesel with 110kW between 3500 and 4000rpm and 320Nm between 1750 and 3000rpm.

The 103TSI feels a little punchier than the 90TSI, but not markedly so, while the diesel – frugal as it is with claimed consumption of 4.9L/100km – costs $36,340 in flagship guise, and is not worth the extra premium.

The ride quality from the all-round independent suspension is noticeably smoother on the 15- or 16-inch alloys found on the 90TSI and 90TSI Comfortline than on the Highlines’ 17-inch units. Magic carpets could well be rougher over corrugations than the base Golf.

One thing all versions have in common is sharp handling and an electric steering system that sends excellent feedback to the driver. The wagon might be longer than the hatch, but it clings to corners with the same tenacity as the hatch, retains the same body manners and turns in with the same veracity.

Nor is there any noticeable booming from the rear despite the bigger area.

Likewise, road noise and wind noise is low for the small-car class – or any class.

Regardless of specification, the cabin is well-crafted and ergonomic to a fault, albeit devoid of pizazz. Soft-touch plastics abound on all touchpoints, a touchscreen with a swiping function is standard, and the simple fascia makes adjusting functions child’s play.

For our money, grabbing a Comfortline with optional sat-nav for a tick over $30k would be the best option. It is the best small-segment wagon bar none, and for us a more sensible choice compared to a Nissan Dualis, Mazda CX-5 or Honda CR-V as well.

All-in-all, the Golf is an excellent option for a family runabout – something the Europeans seem to agree on, given the car’s massive sales there. But Australian buyers are different, which is why SUVs dominate.