Tim has made a mistake, and undone the existence of Posy; he wants his darling daughter back. Thus he needs to avoid changing history prior to her conception, and that means he has to find a way to prevent himself from making the change he has already made. Here, perhaps more than anywhere else, the film fails in its time travel elements, not because it does not make sense to do it that way, but because it appears to violate the rules that it has established for itself.
To recall events, Kit was in a serious accident almost certainly due to her intoxication, and Tim traveled back to prevent her from being in that accident, driving her to the birthday party himself. Then, because of his concern about her safety, he took her back to the New Years Eve party where she met Jimmy, and prevented that meeting--but also interfered with his own past prior to Posy's conception, changing her genetic identity sufficiently that she's a boy. He needs to undo the trip he made to the party. He decides that the best way to do this is by undoing the trip he made to prevent the accident. The theory is that if he alters history by not preventing the accident, in the revised history he will not travel back to take Kit to the party, and instead will have to work with the injured Kit to get her to change her life in the present.
The first issue, really, is how he prevents himself from preventing the accident. The film has clearly been relying on a version of Niven's Law by which once a time traveler has made a trip to the past, the impact of that trip remains in effect. Thus although he might try traveling back to the moment when he left to go back in time to transport her, the version of him existing at that moment in the present history in which the accident never occurred never made that trip.
More complicated yet, that version also has been erased, and so has Kit's accident, because when he traveled to the party with Kit he initiated a history in which she was not with Jimmy but ultimately with Jay. Thus she is not at home drinking and fighting with Jimmy because she has an entirely different life, and not only is there no moment from which Tim departed to drive her to the party, there is no moment when she got behind the wheel drunk.
This further applies to the moment he decided to take her to the New Years party. This is not the Kit he worried about saving; he cannot find the time in this history when he did that, only the time when he arrived at the party--which does not help, because he will again have changed his own past at that party, and will not have recovered his daughter.
There is one possible answer, which in itself raises another set of issues. We know that Tim has the ability to travel to any moment in his past that he remembers. He does not remember the history that he created unless he stayed to live through it; he remembers the history that he erased. It thus is not impossible that he could travel back to the morning of the birthday party and prevent himself picking up Kit, directly. That would restore the history in which she is in the accident.
It is not clear, though, that it would prevent him from making the trip to prevent the accident; it seems he would have to make that change separately. Further, he will have to do so by stretching what the ability has done so far: he will either have to come forward and stop along the way, or stay long enough to prevent himself from making the trip. If he prevents himself from preventing the accident by going to that morning, and then skips back to the future, his self in the newly restored history will have the motivation to make the trip to save Kit as he did; if he prevents that self from making the trip and then comes to the future, he has not prevented the outcome, because he has already made the change he is trying to undo. The only way it might work is to travel to the morning to prevent himself from driving Kit to the party, then skip to the times after the accident when he went back to prevent himself from going back, without coming to the future between those trips.
We do not see him do it, so all we can say is it was very complicated and it is not entirely certain that he could have done what he did.