Preheat the oven to 350F and line a 12-count muffin pan with paper liners.
In a large bowl, whisk together the flour, brown sugar, baking powder, and cinnamon.
In another bowl, whisk together the milk, vegetable oil, applesauce, caramel sauce, eggs, and vanilla.
Add the wet ingredients to the dry and mix just until no large lumps of flour remain.
Next, add the shredded apple and fold it into the batter.
Divide the batter evenly between the muffin tins making sure to fill each one ¾ of the way full.
Bake the cupcakes for 15-17 minutes or until a toothpick inserted into the center comes out clean- or when the tops spring back when gently pressed.
Remove the cupcakes to a wire rack to cool completely before icing.