Bring to a low simmer. Once at a simmer, cook for 4 minutes, stirring occasionally, until mixture is thickened (mixture will thicken further as it cools).
Remove from heat, stir in vanilla, and transfer caramel to a mason jar or other airtight container for storage.
In a small pot, combine 1 tablespoon of the prepared caramel, sugar, and 1/4 cup of the coffee. Heat over medium heat until sugar and caramel completely dissolve and coffee mixture is smooth and uniform in color. Remove from heat and whisk in heavy cream.
Add ice to a 16-ounce cup, and pour in remaining 3/4 cup of cold coffee followed by the caramel mixture and stir. Top with whipped cream and drizzle with more caramel sauce if desired. Serve and enjoy!
To make a Caramel Macchiato Frappuccino, double the sugar (in the drink, not the caramel) and blend with ice until frosty.If you’re using prepared caramel and don’t have heavy cream on hand, you can replace the cream with 1/4 cup of cold milk.If you don’t have cold coffee, put a cup of hot coffee in the freezer for 10 to 20 minutes until it cools down to room temperature or brew a pot at double strength, pour 1 cup of coffee over 1 heaping cup of ice and let it melt.