The best way to know the caramel is done is by using a thermometer. Once it reaches 225-235 degrees F you know it is finished. You will know you’re getting close when the caramel becomes slightly darker brown in color (but it’s still light brown), thickens and pulls away from the sides of the saucepan as you stir. It will also remain solid when removed from the pot and left to cool or put in cold water. When the caramel is finished cooking, remove from heat, add vanilla and stir vigorously.