Which is correct in this situation?

Your answer is correct because in this situation, according to German traffic rules, when approaching a roundabout or a similar controlled intersection, you must yield the right of way to vehicles already on the main road or in the roundabout. This means you have to wait for the blue car to pass if it has priority. You do not need to reach any special understanding or agreement with the other driver; instead, you follow the established priority rules. Waiting ensures safe and orderly traffic flow and prevents confusion or accidents. Remember, "yield to the right" or specific priority signs dictate who goes first, and you must obey these rules strictly.