We'd

Just guessing here.

It might be a derivation from "It would be better if you ......" or "you would be better off if you ..."

No it's actually:

We had better leave before he gets here. Or

You had better leave before he comes home.

Why do we use we'd and you'd w/ had in the past tense?

Pleasehelp, you're trying to apply logic to English. There's no other reason than the fact that it has been said so for a long time.

pleasehelpYou'd better leave.

Why is it in the past tense?

I wouldn't say it was in the past tense. I would say that it is a fixed expression (an idiom) outside the system of grammatical rules. There are hundreds of such fixed expressions in English. No attempt to explain them in terms of grammar ever succeeds.

CJ

So the expression: we'd better leave.

basically means: We better get the **** out of here or It's time to go asap.

Thanks!

Yes. It doesn't have to be as dramatic as that, but it has the same sort of flavor.
Our best option now is to leave, or else ... (Something unpleasant may occur. Just how unpleasant can range from the mild to the severe.

We'd better leave (or we'll be late to dinner with Aunt Sally).
We'd better leave (or we'll be beaten to a pulp by these drunken sailors).
)