Auto-renew option not appearing for membership
Chris,

I just tested this on my site, and you're right.   

If you have the "Pay Later" option selected, the auto-renewal checkbox does not appear.   

The checkbox should always appear, and then when the page goes through verification if 'Pay Later' is selected, and the 'auto-renew' box is selected, that should throw an error to the user.

I've created an issue report on this:

https://issues.civicrm.org/jira/browse/CRM-18299